NPA

RBI ask banks to automate Income recognition & NPA provision

Income Tax - RBI: Automation of Income recognition, asset classification and provisioning – latest guidelines RBI vide its communication September 14, 2020, informed the banks that in spite of its earlier instructions issued on August 04, 2011, to use IT system in place for identification of Non-Performing Assets (NPA) and generation of related data...

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Moratorium accounts not to be declared as NPA until further notice: SC

Income Tax - Moratorium accounts not to be declared as NPA until further notice: Order by Apex Court on September 03, 2020 & September 10, 2020 The apex court heard petition of borrowers on September 03, 2020 seeking interest waiver on loan moratorium granted previously by Reserve Bank of India (“RBI”). In the backdrop of COVID-19, banks had [...

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Financial Stability of Banking Sector – Bank & Borrower

Income Tax - THE FINANCIAL STABILITY OF THE BANKING SECTOR THE BANK AND THE BORROWER A RELATIONSHIP OF TRUST, FAITH, HOPE AND UNDERSTANDING. The advent of banking reforms in India has brought the concept of NPA (Non-Performing Asset) which has changed drastically the perception and approach of the bank and the customer when dealing with loans financed...

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The Willful Defaulter Syndrome in Banks

Income Tax - ‘When virtue is lost, benevolence appears, when benevolence is lost right conduct appears, when right conduct is lost, expedience appears. Expediency is the mere shadow of right and truth; it is the beginning of disorder’. A good and faithful banker ever prefers honourable settlement to the expedient action and expediency cann...

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NPA an Overview

Income Tax - In the current era the word NPA is well heard or well read by us. The banking industry is facing a high NPA problem which leads to downtrend of profitability. Let us try to understand the NPA mechanism in a simple and lucid manner. In simple words NPA stands for Non Performing Assets. If we […]...

Read More

COVID19 Regulatory Package – Asset Classification & Provisioning Clarification

Income Tax - We advise that as per the circular dated April 17, 2020 on asset classification and provisioning, in respect of all accounts classified as standard as on February 29, 2020, even if overdue, the moratorium period, wherever granted, shall be excluded by the lending institutions from the number of days past-due for the purpose of asset class...

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NPAs of Nationalised Banks started declining 

Income Tax - Loans written-off from Balance Sheets of PSBs; As A result of Government’s 4R’s Strategy of Recognition, Resolution, Re-capitalisation and Reforms, NPAs of Nationalised Banks have started declining ...

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Steps taken to expedite and enable resolution of NPAs and recovery

Income Tax - Steps taken to expedite and enable resolution of NPAs and recovery from NPA accounts, include, inter-alia, the following: (1) The Insolvency and Bankruptcy Code, 2016 (IBC) has been enacted, which has provided for taking over the management of the affairs of the corporate debtor at the outset of the corporate insolvency resolution process...

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Audit of Banks- RBI issued guideline for Audit and Auditor appointment

Income Tax - With regard to Statutory Audit, Reserve Bank of India (RBI) has informed that it has issued Guidelines for appointment of Statutory Central Auditors (SCAs) and Statutory Branch Auditors in Public Sector Banks (PSBs), which covers the norms on eligibility, empanelment and selection as well as the procedure for appointment of such auditors....

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Control and resolution of NPAs

Income Tax -  The Gross Advances of Scheduled Commercial Banks (SCBs) increased from Rs.25,03,431 crore as on 31.3.2008 to Rs. 68,75,748 crore as on 31.3.2014, as per the Global Operations Data of the Reserve Bank of India (RBI). As per RBI inputs, the primary reasons for spurt in stressed assets have been observed to be, inter-alia, aggressive lendi...

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Interest on NPA loan can be taxed on receipt basis only

Chitradurga District Co-Op. Central Bank Ltd. Vs DCIT (ITAT Bangalore) - DCIT Vs. Chitradurga District Co-Op. Central Bank Ltd. (ITAT Bangalore) If an assessee adopts the mercantile system of accounting and in his accounts he shows a particular income as accruing, whether that amount is really accrued or not is liable to bring the said income to tax. His accounts shoul...

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Not to declare petitioner as NPA till Further Order: SC

Gajendra Sharma Vs Union of India (Supreme Court) - Gajendra Sharma Vs Union of India (Supreme Court ) The issue under consideration is whether the interest will be charged on loan during moratorium period which is declared by RBI due to COVID-19? As per RBI’s circular dated 27th March, 2020 the RBI has extended the moratorium period from June ...

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Court’s altruistic approach in granting Moratorium for NPA

Transcon Skycity Private Limited Vs. ICICI Bank (Bombay High Court) - The period of the moratorium during lockdown will not be reckoned by ICICI Bank for the purposes of computation of the 90-day NPA declaration period. Further, if the lockdown extends beyond 31st May 2020, then these days will be deferred accordingly, irrespective of whether the moratorium itself is ...

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Extension of Moratorium – New flavour of the season

Shakuntala Educational & Welfare Society Vs Punjab & Sind Bank (Delhi High Court) - Hon’ble Court opined that irrespective of the question, as to whether the moratorium as envisaged by RBI would be applicable to the petitioner qua the instalments, any classification of the petitioner’s accounts as NPA in present situation would certainly cause a grave and irreparable loss to th...

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HC restrains bank from declaring an account as NPA till further order- Covid 19

Shakuntla Educational & Welfare Society Vs Punjab & Sind Bank (Delhi High Court) - The issue under consideration is that the petitioner seeks a direction to the respondent not to declare its pending loan accounts as Non Performing Assets (NPA). The petitioner also seeks a direction to the respondent for grant of moratorium of three months to it in terms of circular issued by the R...

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Automation of Income Recognition, Asset Classification and Provisioning processes in banks

RBI/2020-21/37 Ref. No. DoS.CO.PPG./SEC.03/11.01.005/2020-21 - (14/09/2020) - In order to ensure the completeness and integrity of the automated Asset Classification (classification of advances/investments as NPA/NPI and their upgradation), Provisioning calculation and Income Recognition processes, banks are advised to put in place / upgrade their systems to conform to the fo...

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COVID19 Regulatory Package – Asset Classification & Provisioning

RBI/2019-20/220 DOR. No. BP. BC. 63/21.04.048/2019-20 - (17/04/2020) - In respect of all accounts classified as standard as on February 29, 2020, even if overdue, the moratorium period, wherever granted, shall be excluded by the lending institutions from the number of days past-due for the purpose of asset classification under the IRAC norms....

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President assents Banking Regulation (Amendment) Ordinance, 2017 on NPA

No. 1 of 2017 - (04/05/2017) - Banking Regulation (Amendment) Ordinance, 2017 enables the Union Government to authorize RBI to direct banking companies to resolve specific stressed assets (NPA)...

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Section 23 of the Banking Regulation Act, 1949- Relaxations in Branch Licensing Policy

RBI/2010-11/283 RPCD.CO.RRB.BC No. 28/ 03.05.90-A/2010-11 - (18/11/2010) - Accordingly, Reserve Bank of India hereby permits Regional Rural Banks to open branches in Tier 3 to Tier 6 centres (with population up to 49,999 as per Census 2001 – details of classification of centres tier-wise furnished in Annex II) without having the need to take permission from Reserve Bank...

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Recent Posts in "NPA"

Interest on NPA loan can be taxed on receipt basis only

Chitradurga District Co-Op. Central Bank Ltd. Vs DCIT (ITAT Bangalore)

DCIT Vs. Chitradurga District Co-Op. Central Bank Ltd. (ITAT Bangalore) If an assessee adopts the mercantile system of accounting and in his accounts he shows a particular income as accruing, whether that amount is really accrued or not is liable to bring the said income to tax. His accounts should reflect true and correct statement of ...

Read More

RBI ask banks to automate Income recognition & NPA provision

RBI: Automation of Income recognition, asset classification and provisioning – latest guidelines RBI vide its communication September 14, 2020, informed the banks that in spite of its earlier instructions issued on August 04, 2011, to use IT system in place for identification of Non-Performing Assets (NPA) and generation of related data...

Read More
Posted Under: Fema / RBI |

Automation of Income Recognition, Asset Classification and Provisioning processes in banks

RBI/2020-21/37 Ref. No. DoS.CO.PPG./SEC.03/11.01.005/2020-21 (14/09/2020)

In order to ensure the completeness and integrity of the automated Asset Classification (classification of advances/investments as NPA/NPI and their upgradation), Provisioning calculation and Income Recognition processes, banks are advised to put in place / upgrade their systems to conform to the following guidelines latest by June 30, 20...

Read More

Moratorium accounts not to be declared as NPA until further notice: SC

Moratorium accounts not to be declared as NPA until further notice: Order by Apex Court on September 03, 2020 & September 10, 2020 The apex court heard petition of borrowers on September 03, 2020 seeking interest waiver on loan moratorium granted previously by Reserve Bank of India (“RBI”). In the backdrop of COVID-19, banks had [...

Read More
Posted Under: Fema / RBI |

Not to declare petitioner as NPA till Further Order: SC

Gajendra Sharma Vs Union of India (Supreme Court)

Gajendra Sharma Vs Union of India (Supreme Court ) The issue under consideration is whether the interest will be charged on loan during moratorium period which is declared by RBI due to COVID-19? As per RBI’s circular dated 27th March, 2020 the RBI has extended the moratorium period from June 01 to 31st August, 2020 […]...

Read More

Financial Stability of Banking Sector – Bank & Borrower

THE FINANCIAL STABILITY OF THE BANKING SECTOR THE BANK AND THE BORROWER A RELATIONSHIP OF TRUST, FAITH, HOPE AND UNDERSTANDING. The advent of banking reforms in India has brought the concept of NPA (Non-Performing Asset) which has changed drastically the perception and approach of the bank and the customer when dealing with loans financed...

Read More
Posted Under: Fema / RBI |

The Willful Defaulter Syndrome in Banks

‘When virtue is lost, benevolence appears, when benevolence is lost right conduct appears, when right conduct is lost, expedience appears. Expediency is the mere shadow of right and truth; it is the beginning of disorder’. A good and faithful banker ever prefers honourable settlement to the expedient action and expediency cann...

Read More
Posted Under: Fema / RBI |

COVID19 Regulatory Package – Asset Classification & Provisioning Clarification

VV.BP.No. 8124/21.04.048/2019-20 (06/05/2020)

We advise that as per the circular dated April 17, 2020 on asset classification and provisioning, in respect of all accounts classified as standard as on February 29, 2020, even if overdue, the moratorium period, wherever granted, shall be excluded by the lending institutions from the number of days past-due for the purpose of asset class...

Read More
Posted Under: Fema / RBI |

NPA an Overview

In the current era the word NPA is well heard or well read by us. The banking industry is facing a high NPA problem which leads to downtrend of profitability. Let us try to understand the NPA mechanism in a simple and lucid manner. In simple words NPA stands for Non Performing Assets. If we […]...

Read More
Posted Under: Fema / RBI |

Court’s altruistic approach in granting Moratorium for NPA

Transcon Skycity Private Limited Vs. ICICI Bank (Bombay High Court)

The period of the moratorium during lockdown will not be reckoned by ICICI Bank for the purposes of computation of the 90-day NPA declaration period. Further, if the lockdown extends beyond 31st May 2020, then these days will be deferred accordingly, irrespective of whether the moratorium itself is extended beyond 31st May 2020....

Read More

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